Category Archives: Mexico

Mexico’s oil and natural gas fields are so near but yet so far from the United States, where the hydraulic fracturing (fracking) and horizontal drilling revolution have turned it into a global behemoth. Now Mexico stands poised as an unconventional threat as well.

The Eagle Ford Shale in South Texas, in the cradle of the unconventional fields, extends into the Mexican state of Tamaulipas. But while the small companies that were the guerrilla fighters of the revolution continue to buzz the formation in Texas with drilling activity, the Tamaulipas side is eerily silent.Mexico’s state oil company Petroleos Mexicanos (Pemex) drilled about 20 wells a few years ago, but without apparently being unable to master the fracking/horizontal drilling technology.

This time round, with the instruments of the 2013-14 energy reform under their belt, the Mexican energy authorities have announced the nation’s first upstream auction of unconventional resources in the wake of a government-sponsored forum in the border city of Reynosa, Tamaulipas.

Avant Energy is planning to build a logistics system that will supply refined products to Mexico’s Bajio region via rail from the Port of Altamira in the northeastern state of Tamaulipas, the company said Wednesday.

The network will be known as Supera and it will be built along with strategic partners Savage Services and Kansas City Southern (KCS), Avant said in a statement.

Avant was not immediately available for comment. The company already has all the port facilities and regulatory permits required for construction.

The system will be anchored by a 1.2-million-barrel marine import terminal at the port of Altamira, which will be able to unload Panamax vessels.

Mexico held back-to-back licensing rounds on 12 July 2017 as part of the President Enrique Peña Nieto administration’s goal to lure private investment to the Latin American nation’s upstream.To use an American baseball analogy, Mexico knocked it out of the park each time and now Mexican oil and gas is gaining momentum.The duo-round system on 12 July encompassed a total of 24 blocks. By the end of the day, 21 blocks had been awarded.

Mexico will delay its next offshore oilfield auctions by a month, giving international bidders more time to evaluate recent major crude discoveries that highlight the potential value of the assets.A new billion-barrel find announced last week “confirms that the Mexican side of the Gulf of Mexico is very prolific,” said Juan Carlos Zepeda, Mexico’s chief oil regulator in an interview Friday. “International and national interest is awakening.”July 12 marked perhaps the single most successful day for the Mexico oil industry since the government ended Petroleos Mexicanos’s government-owned production monopoly in 2014. Premier Oil Plc, Sierra Oil & Gas and Talos Energy LLC reported a reservoir with an estimated 1.4 billion to 2 billion barrels of oil in the southern Gulf of Mexico. On the same day, Italian producer Eni Spa said its March find in Mexico’s offshore waters also contains the equivalent of as much as 1 billion barrels, and Mexico successfully auctioned 21 of 24 onshore fields to private companies.

A consortium of Premier Oil Plc, Sierra Oil & Gas S de RL de CV and Talos Energy LLC made the discovery in the shallow waters of the southern Gulf of Mexico just two years after winning the exploration license. It’s the first new find by a private company in the country in almost 80 years, according to consultant Wood Mackenzie Ltd., possible only after the government ended the monopoly of state-run Petroleos Mexicanos.The Zama discovery “is the most important achievement so far of Mexico’s energy reform,” Pablo Medina, the senior upstream analyst for Latin America at Wood Mackenzie, said by email. “It is one of the 15 largest shallow-water fields discovered globally in the past 20 years.”

Talos Energy announced on Wednesday that it, along with partners Sierra Oil & Gas and Premier Oil, had made a significant discovery offshore Mexico through the Zama-1 wildcat well.Initial tests have indicated that Zama could hold up to 1.4 billion-2 billion barrels of original oil in place. The reservoir is thought to contain mainly light oil, with gravities of 28-30 degrees API, in addition to associated gas.“This is both a historic and significant discovery,” CEO Tim Duncan said in a statement.

Premier Oil’s shares rocketed as much as 38 percent on Wednesday on news it discovered potentially more than 1 billion barrels of oil off the coast of Mexico, a major victory for Latin America’s No. 2 economy since the historic opening of its energy sector.Premier, which holds a 25 percent interest in the block alongside Talos Energy and Sierra Oil and Gas, said estimates for the Zama-1 well were in excess of 1 billion barrels, which could extend into a neighboring block.The news of the discovery, in the first shallow-water offshore exploration well drilled by the private sector in Mexico since the country’s 2014 energy sector opening, sent Premier’s shares rocketing as much as 38 percent on the London Stock Exchange and helped the peso strengthen 0.70 percent to 17.785 per dollar.In afternoon trading in London, Premier Oil shares were up 34 percent at 61.83 pounds.The find also hands the government of President Enrique Pena Nieto, which ended state-oil firm Pemex’s decades-long monopoly, a key victory as Mexico prepares to embark on fraught trade, security and immigration talks with U.S. President Donald Trump’s administration.Premier Oil’s Chief Executive Tony Durrant said the discovery “adds materially” to Premier’s portfolio of assets.”(The) Zama-1 discovery announcement appears about as material as we could possibly imagine at this early stage,” Jefferies analysts wrote in a note.The project is jointly owned with Talos Energy, which acts as operator and has a 35 percent stake, and Sierra Oil and Gas which holds the remaining 40 percent.

Mexico is racing against the clock to get natural gas pipelines online this summer.The nation has found itself “in a tight situation,” David Madero, who oversees the government’s Natural Gas Control Center, said in an interview in Mexico City. The season when gas demand typically peaks is fast approaching, and Mexico is still dealing with setbacks in getting long-anticipated pipelines into service.The delays are causing a glut of natural gas to swell up north of the border as U.S. shale drillers wait for the lines to carry their fuel to market. Citigroup Inc. warned in a research note two months ago that the holdups in Mexico would probably force gas in the Gulf Coast to trade at heavy discounts.

Mexico’s economy grew faster in first quarter 2017 than previously estimated. Gross domestic product (GDP) increased 2.7 percent, according to the government’s second estimate. Consequently, the consensus 2017 GDP growth forecast was revised to 2 percent from 1.7 percent in April.Other, more recent data were mixed; employment growth improved, but exports, industrial production and retail sales fell. Inflation rose further while the peso held steady against the dollar.

Mexico is of enormous importance to the United States. We have strong strategic interests in a relationship of respect and collaboration with Mexico while we work through differences on trade, security, and migration.U.S.-Mexico relations touch the daily lives of more Americans than ties with any other country, whether through culture, commerce or travel. U.S. prosperity and the security of our homeland are deeply affected by the type of relationship we have with our southern neighbor.Much can be improved between Mexico and the U.S. for the good of both countries, but tackling these challenges need not be a win-lose proposition. Both countries can gain security and prosperity. Reviving the animosity and “distance” that characterized our relationship in the 1970s or 1980s is dangerous and runs counter to our interests.The six of us have served as U.S. Ambassadors to Mexico, managing the ever-improving relationship across Democratic and Republican administrations since the late 1980s. We have seen firsthand the strategic value of working cooperatively with Mexico to tackle common problems, including crime, terrorism and global economic competition. Along the way, Mexico has become a more democratic and prosperous country, making it a better and more reliable partner.